CFTC Charges Four Individuals for False Solicitation of Funds

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    • The agency has frozen defendants’ assets and appointed a temporary receiver.
    • Cryptocurrency remains unregulated since its inception.

    The Commodity Futures and Trading Commission (CFTC), a United States government agency, charged four individuals and their company for defrauding investors. The agency said they falsely solicited funds for trading in precious metals and cryptocurrencies.

    CFTC Says Investments Might Not Be Recovered Fully

    The CFTC charged Rene Larralde and Juan Pablo Valcarce from Florida, Brian Early from Louisiana and Alisha Ann from Arkansas. Their unincorporated firm, Fundsz, has over 14,000 platform users according to CFTC and the platform’s official website. Additionally, the company also runs a private group on social media network Facebook with nearly 6K members.

    Assets of the accused have been frozen and a temporary receiver has been appointed. Judge Wendy Berger signed an ex parte statutory restraining order. Additionally, Ian McGinley, Director of Enforcement, said “The CFTC continues to root out individuals who defraud customers in the cryptocurrency and precious metals markets.”

    Defendants, according to the release, made several claims to lure investors on the platform. One of the claims was “400X growth” in invested funds through Fundsz. Furthermore, the defendants claimed their investment will be used for the welfare of people too.

    Usually the bad actors do not possess the sum necessary to set-off investors’ losses in entirety. Therefore, the derivatives market regulator said fund recovery might not be possible. Cryptocurrency sector is not new to frauds. Investors have experienced similar instances in the past too.

    Lawmakers’ Skepticism Over Crypto

    A victim reportedly lost $95K through a cryptocurrency scam on Facebook in December 2022. Social media frauds are common. People dashing to make money or without proper education of the sector easily fall victim to these frauds. According to the Department of Financial Protection and Innovation (DFPI), a US government agency, imposter scams are some of the most reported scams.

    In June 2022, the U.S. Department of Justice (DOJ) announced criminal charges in four separate crypto-related lawsuits involving six individuals. A crypto ponzi and securities scheme generated around $100 Million from the users. Furthermore, Juan Antonio Gonzalez, a U.S. attorney, suggested investors steer clear with profit-making opportunities appearing too good to be true.

    U.S. lawmakers are still in the process of assessing the cryptocurrency sector to formulate regulations. Democrat Maxine Waters recently expressed deep concerns about PayPal’s stablecoin PYUSD. She is still working with the United States House Committee on Financial Services on consumer safety.

    Cryptocurrency market has been unregulated since its inception. Interventions from the U.S. top financial cop Securities and Exchange Commission (SEC) led to decline in crypto prices. Moreover, the agency’s chair, Gary Gensler, calls the industry a financial wild west and believes a majority of the projects will fail.


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    Anurag Batham
    Anurag Batham is a journalist and research analyst at CryptoSunday. He has covered blockchain, crypto, metaverse and more since 2021 and holds a keen interest in global economy and climate change with a passion to deliver useful information to the readers.